Unveiling the annual supplement to the foreign trade policy, commerce & industry minister Kamal Nath promised exporters what they had been long clamouring for: an exemption from the 12.36% service tax. All services rendered abroad and charged on exports from India as well as services rendered in India but utilised for exports would no longer be taxed. This will save exporters over Rs 650 crore.

“If it wasn’t for the rupee, I would have set a higher target. I am confident of the resilience of exporters and that they would meet the target,” Nath said. He projected exports at $200 billion by 2008-09. The Duty Entitlement Passbook scheme has been extended by a year, to March 2008.

Kamal Nath placed special emphasis on the agriculture sector to boost rural employment. He expanded the scope of the Vishesh Krishi and Gram Udyog Yojana to include exports of value-added variants of several farm and forest products.

To strengthen infrastructure like cold storage, he introduced a new scheme to incentivise agro-processing. Status holders will be rewarded duty credit equal to 10% of the value of agri exports, provided they use it for duty redemption on the import of cold storage, pack houses and reefer vans.

• Hi-tech goods to get 10% duty credit on incremental exports
• DEPB scheme extended by a year to March 31, 2008
• Focus Product & Focus Market scheme gets Rs 1,000 cr, 50% more
• Procedures made simpler, SEZ developers get more sops

Noting that the tiny and cottage industry was adversely hit by the strengthening rupee, he extended the time given for completing export obligation to 12 years from eight years now under the Export Promotion Capital Goods scheme.

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